Seed Co Limited recorded a 28% slump in volumes due to late rains and the El-Nino effect.
The company released its third quarter ended 31 December 2023 trading update.
“In the third quarter, the total volume of Zimbabwe seed sales witnessed a 28% decline compared to the corresponding period in the preceding year, a consequence of delayed rains and diminished enthusiasm for cropping due to the El-Nino phenomenon”, read the trading update.
According to the company, economic difficulties are persisting in Zimbabwe. Foreign and local currency are in short supply and the market is dominated by the informal economy over the formal sector.
The company sold 18,520 tonnes of seed in the third quarter compared to 25,814 sold in the prior year comparative period.
Revenue in inflation adjusted terms increased by 41% from ZW$ 189.40bn to ZW$ 266.5bn in the third quarter. In historical cost terms revenue was 443% up at ZW$189.4bn compared to ZW$39.9bn in the comparative period last year.
The company attributed the revenue increase to increasing proportion of USD denominated sales against the pronounced depreciation of the exchange rate and the resulting inflationary impacts.
Operating profit at ZW$484.6bn was 1,582% above prior year period amount of ZW$28.8bn.
In the outlook the company banks on fiscal and monetary authorities stabilizing the foreign exchange market, curbing inflation, and restoring business confidence.
The company banks on demand for small grains to spur annual sales volume performance not only in Zimbabwe but also in neighbouring countries.
The company acknowledged that economic challenges are not peculiar to Zimbabwe as regional economies are also grappling with challenges such as shortages of foreign currency, inflationary trends, and escalating interest rates.
Regionally, record sales in East Africa and certain parts of Southern Africa were registered, which is anticipated to mitigate the overall impact of decreased trading in some Southern African markets that were adversely affected by El-Nino conditions.
